The Food Supply and Distribution System of Tirana, Albania
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AGRICULTURAL MANAGEMENT, MARKETING AND FINANCE WORKING DOCUMENT 15 The food supply and distribution system of Tirana, Albania AGRICULTURAL MANAGEMENT, MARKETING AND FINANCE WORKING DOCUMENT 15 The food supply and distribution system of Tirana, Albania by Arben Verçuni and Edvin Zhllima Agricultural Management, Marketing and Finance Service (AGSF) Rural Infrastructure and Agro-Industries Division FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2008 The views expressed in this publication are those of the author(s) and do not necessarily reflect the views of the Food and Agriculture Organization of the United Nations. The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned. All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes are authorized without any prior written permission from the copyright holders provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for such permission should be addressed to: Chief Electronic Publishing Policy and Support Branch Communication Division FAO Viale delle Terme di Caracalla, 00153 Rome, Italy or by e-mail to: [email protected] © FAO 2008 The food supply and distribution system of Tirana, Albania iii Contents LIST OF TABLES, FIGURES, MAPS AND BOXES iv ABBREVIATIONS AND ACRONYMS vii EXECUTIVE SUMMARY ix 1. INTRODUCTION 1 1.1 WHAT IS A FOOD SUPPLY AND DISTRIBUTION SYSTEM? 1 1.2 THE CITY OF TIRANA 1 1.3 THE TIRANA REGION 4 2. THE SOCIO-ECONOMIC, INSTITUTIONAL AND LEGISLATIVE CONTEXT 7 2.1 POVERTY 7 2.2 THE LABOUR MARKET 8 2.3 TRANSPORTATION 10 2.4 WASTE MANAGEMENT 11 2.5 INFRASTRUCTURE 12 2.6 THE POLITICAL AND MACROECONOMIC CONTEXT 12 2.7 THE INSTITUTIONAL CONTEXT 13 3. URBAN FOOD DEMAND, FOOD INSECURITY, AND FOOD SUPPLY AND DISTRIBUTION SYSTEMS 15 3.1 URBAN FOOD DEMAND AND FOOD INSECURITY 15 3.2 FOOD SUPPLY SYSTEMS 18 3.3 URBAN FOOD DISTRIBUTION SYSTEMS 22 4. THE CITY AND THE FOOD SUPPLY AND DISTRIBUTION IN THE FUTURE 33 4.1 THE CITY IN TEN YEARS 33 4.2 THE STATUS QUO SCENARIO 33 4.3 THE DESIRABLE SCENARIO 35 5. CONCLUSIONS 37 REFERENCES 39 ANNEX 41 iv List of tables, figures, maps and boxes LIST OF TABLES 1. OVERVIEW OF THE CITY OF TIRANA 1 2. UNEMPLOYMENT IN THE TIRANA REGION 9 3. UNEMPLOYMENT IN THE CITY OF TIRANA IN 1990 (IN PERCENTAGES) 9 4. EMPLOYMENT IN THE CITY OF TIRANA (IN PERCENTAGES) 10 5. MAJOR MEANS OF TRANSPORTATION IN THE CITY OF TIRANA (IN PERCENTAGES) 10 6. ANNUAL HOUSEHOLD CONSUMPTION EXPENDITURES, 1993, 1994, 2000 (IN PERCENTAGES) 15 7. COMPOSITION OF THE HOUSEHOLD BUDGET ACCORDING TO THE HEAD OF HOUSEHOLD CATEGORY (IN PERCENTAGES) 16 8. ANNUAL TRENDS IN PRODUCT SUPPLY PER CAPITA IN ALBANIA, 1965–2002 (GRAMS/DAY) 17 9. HOUSEHOLD BUDGET 18 10. PRODUCTION, CONSUMPTION AND FOOD BALANCE IN THE CITY OF TIRANA 19 11. PRICES AND MARGINS OF THE MAIN FOOD PRODUCTS IN WHOLESALE AND RETAIL MARKETS, 2004 20 12. DIFFERENT TAXATION LEVELS, 2005 30 LIST OF TABLES IN ANNEX 13. PEOPLE INTERVIEWED 41 14. DATA ON THE TIRANA REGION 42 15. POVERTY AND INEQUALITY INDICATORS IN THE TIRANA REGION 43 16. MAIN ECONOMIC DATA, 1998-2004 44 17. POVERTY INDICATORS IN ALBANIA, 1998, 2002, 2003 44 18. MAIN AGROFOOD PRODUCTION, 2000–2004 45 19. PRODUCTION OF FRUITS PER CAPITA, 2003–2004 45 20. SUPPLY LEVEL, PRODUCTION AND IMPORTS/EXPORTS FOR THE PROCESSED FRUITS AND VEGETABLES SUBSECTOR, 2000–2003 (IN KG) 46 21. SUPPLY LEVEL, PRODUCTION AND IMPORTS/EXPORTS FOR THE FLOUR SUBSECTOR, 2000–2003 (IN KG) 46 22. SUPPLY LEVEL, PRODUCTION AND IMPORTS/EXPORTS FOR THE OIL SUBSECTOR, 2000–2003 (IN KG) 46 23. SUPPLY LEVEL, PRODUCTION, AND IMPORTS/EXPORTS FOR THE SOFT DRINKS AND FRUIT JUICE SUB-SECTOR, 2000–2003 (IN LITRES) 46 24. DOMESTIC PRODUCTION OF AGRO-INDUSTRY AND MEAT SUBSECTOR (IN MILLION ALL) 47 25. FRESH MEAT PRODUCTION (IN TONNES) 47 26. PRODUCTION PRICE LEVELS, 2002, 2003, 2004 (IN ALL/KG) 47 27. PRODUCTION PRICE LEVELS FOR FOOD PROCESSED PRODUCTS (IN ALL), 2002–2003 AND THEIR VARIATION (BASE YEAR 2002) 48 LIST OF FIGURES 1. PRICE LEVELS FOR TOMATOES, PEPPERS AND GRAPES IN DIFFERENT MONTHS OF 2004 21 2. MARKETING CHANNELS 23 3. THE DYNAMICS OF THE TIRANA POPULATION, 2001–2016 33 LIST OF MAPS 1. DISTRIBUTION OF NEW HOUSING AMONG TIRANA MINI-MUNICIPALITIES 2 The food supply and distribution system of Tirana, Albania v 2. POPULATION DISTRIBUTION BY MINI-MUNICIPALITIES OF TIRANA 3 3. THE RING ROAD OF TIRANA 3 4. THE CITY OF TIRANA AND THE TIRANA REGION 4 5. POVERTY AND INEQUALITY IN THE TIRANA MINI-MUNICIPALITIES (IN PERCENTAGES) 8 6. THE PUBLIC RETAIL MARKET DISTRIBUTION IN THE CITY OF TIRANA 25 7. THE PUBLIC WHOLESALE MARKET DISTRIBUTION IN THE CITY OF TIRANA 28 8. SLAUGHTERHOUSE DISTRIBUTION IN THE CITY OF TIRANA 29 LIST OF BOXES 1. CONSUMER PROTECTION ASSOCIATION 22 2. ASTRIT, TRADER, 45 YEARS OLD 26 3. ZANA, HOUSEWIFE, 42 YEARS OLD 26 4. PETRIT, WHOLESALER, 40 YEARS OLD 28 5. NARDI, STREET VENDOR, 35 YEARS OLD 30 The food supply and distribution system of Tirana, Albania vii Abbreviations and acronyms ACIT Albanian Centre for International Trade ALL Lek (Albanian Currency) EU European Union FAO Food and Agriculture Organization of the United Nations FNAP Food and Nutrition Action Plan FSDS Food Supply and Distribution System GDP Gross Domestic Product GTZ German International Cooperation Agency INSTAT Institute of Statistics KM Kilometre LSMS Living Standards Measurement Survey MAFCP Ministry of Agriculture, Food and Consumer Protection MDG Millennium Development Goals MOE Ministry of Economy MOF Ministry of Finance MOH Ministry of Health NSSED National Strategy for Socio-Economic Development SAR Stabilization and Association Report UNICEF United Nations Children’s Fund WHO World Health Organization The food supply and distribution system of Tirana, Albania ix Executive summary Metropolitan Tirana has experienced a drastic demographic change caused primarily by internal migratory flows. The demographic growth in Tirana has led to urban expansion and loss of productive land to the point that the regional food balance is now negative. An analysis of poverty distribution shows that urban areas have lower poverty levels and higher consumption rates per capita than rural areas. Tirana also has the highest socio-economic inequality rate: poverty levels average around 18 percent of the city population, vary considerably and are higher in the suburban mini-municipalities. The poor in Tirana are food-insecure. In 2005 the population of Tirana consumed 215 151 tonnes of food and is expected to consume 282 783 tonnes by 2016. The population is expected to reach 528 750 by 2016. This report discusses a number of problems encountered in the effective management of food supply and distribution systems (FSDSs): • City supply and distribution channels are characterized by fragmentation and confusion regarding role specialization. • Consumers appear to be demanding higher standards of service in the food market (55 percent think that they have inappropriate market facilities and 68 percent see street selling as a problematic issue). • There are 15 public markets in Tirana, although only 70 percent of this surface is currently exploitable, only 50 percent of the capacity is exploited in the meat market. • Transport infrastructure near markets is also poor and is likely to deteriorate as food demand increases. • Hygiene and maintenance conditions vary from market to market, but are generally poor. • Sixty percent of fruits and vegetables sold year-round are imported from other countries, while rural areas of the Tirana district contribute only seven percent of the total supply. • The lack of a medium-term regulatory plan for Tirana adds confusion to the markets’ organization. Some steps have been taken to address these market problems and growing demands. For example, in 2004, ALL2 456 million (US$24 560 000) were allocated by the municipality for public investments (the largest allocation in the last four years) in transportation and market improvement and upkeep. The purpose of this document is to recommend other ways of improving the market system: • Setting up and opening markets will obviously require involvement of public funds and/ or powerful donors. Investments in already established markets should be aimed at re-planning location and redesigning offered service mixes,and upgrading necessary infrastructure. Increased efficiency of the market system will create opportunities for eliminating the abusive and speculative component of marketing margins, thus allowing for a reduction of retail prices; if costs are lower, lower margins will be needed to cover them. • Suburban ‘informal’ areas should be legalized and become attractive locations to establish markets and slaughterhouses. Central and local governments would lead programmes aimed at supply regulation and would work together in developing local capacities. x Executive summary • Municipality staff should urgently be given some guidelines on effective management of the markets. • Foodstuffs wholesale markets and fruit and vegetable wholesale markets should be in different locations and well distributed throughout the city – both of which are not the case at present – in order to allow better planning of public retail markets, which get their supplies from wholesalers.